Spouse or parents in India: filing status, ITINs and dependents

Family situations are where NRI returns differ most from the standard American case. The rules turn on citizenship and residency of each person, not on where they live.

A spouse who is not a US resident

If your spouse is a non-resident alien, you have three realistic options:

• Married filing separately. Simple, but with higher rates and the loss or reduction of several credits.
• Treat your spouse as a US resident (Section 6013(g) election). This lets you file jointly. The cost is that your spouse's worldwide income, including Indian income, becomes part of the US return, and the election stays in force until it is ended. The spouse needs an SSN or ITIN, and the election statement is attached to the return.
• Head of household. If you have a qualifying child living with you and meet the other tests, you may be treated as unmarried for this purpose when your spouse is a non-resident alien and has not made the election above.

Whether the joint filing saves money depends on how much your spouse earns in India, how much Indian tax is creditable (foreign tax credit), and whether you plan to leave the election in place after your spouse moves to the US.

ITIN or SSN

An ITIN is for people who need a US tax number but cannot get an SSN. It is applied for with Form W-7, normally attached to a tax return. ITINs that go unused on a return for three consecutive years expire. An ITIN does not authorise work and is not a substitute for an SSN where a credit requires one.

Parents in India

You can claim a dependent only if they are a US citizen, national or resident alien, or a resident of Canada or Mexico. Parents who are Indian citizens living in India, and who have never been US residents, are not eligible however much you support them. You cannot take the dependent deduction or credit for them.

Children

The Child Tax Credit is $2,200 per qualifying child for tax year 2025. It requires:

• the child to have a Social Security number valid for employment
• at least one parent (both, if you file jointly, in some cases) to have an SSN valid for work

A child with only an ITIN can usually qualify for the smaller credit for other dependents, not the Child Tax Credit. Children born in the US are citizens and get an SSN, but a child born in India who is brought to the US on a dependent visa is a resident alien, and the SSN has to be obtained before filing.

What to watch

• Do not claim an Indian-resident relative as a dependent. It is a common error, and the IRS matches dependents' tax numbers.
• Dependent care and education credits both require SSNs for the child or student.
• If your spouse joins you partway through the year, you may be filing a joint return from a later date and may need a dual-status statement for them. Plan it before the year ends.

Marital and residency elections are hard to reverse. Model the joint versus separate result for the next two years before you choose.